A new Responsible Lending Code and Regulations came into effect on July 7 under the Credit Contracts and Consumer Finance Act (CCCFA).

The changes focus on relaxing the current onerous and conservative approach to lending which has made many borrowers turn away from banks to finance companies. The following changes are confirmed:

  • ‘Savings’ and ‘investments’ will no longer be considered as examples of outgoings for lenders to further inquire about when making an assessment of the borrower’s likely expenses.
  • There will be no need for lenders to inquire into a borrower’s current living expenses when a borrower provides a detailed breakdown of their future living expenses (benchmarked against statistical data).
  • Lenders can ask borrowers how their expenses are likely to change once they take on debt while assessing the borrower’s recent bank transaction records.
  • The requirement for ‘sufficient detail’ to be provided will only apply to information coming directly from borrowers, and not from banks.
  • A ‘reasonable surplus’ will not be required if lenders have applied adequate buffers and adjustments to income and expenses.
  • A full income and expenses assessment may not be required where it is obvious that a loan is affordable.

When it comes to purchasing a property, we would still recommend to include a finance clause in the Agreement for Sale and Purchase. This is to ensure you are satisfied the bank will lend to you to purchase that particular property.

It pays to speak to a legal professional if you are purchasing a property, to make sure you protect yourself as much as possible.


Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Thérèse Greenlees and Hanifa Kodirova